This document discusses material balance applied to oil reservoirs. It introduces the Schilthuis material balance equation, which is a basic tool for interpreting and predicting reservoir performance. The general form of the material balance equation accounts for underground withdrawal of oil and gas, expansion of oil and originally dissolved gas, expansion of any gas cap gas, and changes in hydrocarbon pore volume due to water and pore volume changes. The document provides the specific equations that make up the material balance and shows how it can be simplified for different reservoir drive mechanisms, including solution gas drive above and below the bubble point pressure. It also provides examples of calculating recovery factors and gas saturation from the material balance equation for a reservoir undergoing primary depletion by solution gas drive.